Central Bank of Ireland Amends Lending Rules for Credit Unions
The Central Bank of Ireland issued new lending measures for credit unions and these measures will come into effect from January 2020. These measures will allow credit unions to undertake increased longer term lending, including home mortgage and business lending. Further additional capacity is to be extended to larger, stronger credit unions that meet certain requirements.
The changes in the measures with respect to the proposed measures include removal of the existing lending maturity limits, which cap the percentage of credit union lending that may be outstanding for periods of more than 5 and 10 years. The maturity limits will be replaced by the new concentration limits, on a tiered basis, for home mortgage and business loans, expressed as a percentage of total assets. There are the following three tiers under the changes:
- A combined concentration limit for house and business loans of 7.5% of total assets for all credit unions
- A 10% limit, conditional on a credit union satisfying asset size (at least EUR 50 million) and regulatory reserves qualifying criteria and notifying the central bank in advance
- A 15% limit for credit unions with total assets of at least EUR 100 million, subject to the approval of the central bank
These changes follow a comprehensive review of the lending framework for credit unions. Following the review, on October 24, 2018, the Central Bank of Ireland had published a consultation on potential changes to the lending framework for credit unions. The consultation had sought views from credit unions and other sector stakeholders on the proposed changes. The Central Bank of Ireland has also published the responses received to this consultation, along with a Feedback Statement.
Related Links
Keywords: Europe, Ireland, Banking, Credit Unions, Lending Rules, Credit Risk, Regulatory Impact Analysis, Central Bank of Ireland
Previous Article
APRA Issues Proposal to Amend Leverage Ratio Requirement for BanksRelated Articles
EC Adopts Financial Reporting Changes Arising from Benchmark Reforms
EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.
BIS Bulletin Examines Key Elements of Policy Response to Cyber Risk
BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.
HMT Updates List of Post-Brexit Equivalence Decisions in UK
HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.
EBA Issues Erratum for Technical Package on Reporting Framework 3.0
EBA published an erratum for technical package on phase 1 of the reporting framework 3.0.
APRA Publishes FAQ on Measurement of Credit Risk Weighted Assets
APRA updated a frequently asked question (FAQ), for authorized deposit-taking institutions, on the measurement of credit risk weighted assets.
EBA Publishes Risk Dashboard for Third Quarter of 2020
EBA published the quarterly risk dashboard, along with the results of the Risk Assessment Questionnaire survey among 60 banks and 15 market analysts.
ECB Analysis Shows Privacy as Biggest Concern in Use of Digital Euro
ECB concluded the public consultation on the introduction of a digital euro in EU.
ECB Finalizes Guide on Supervisory Approach to Bank Consolidation
ECB published a guide that sets out the supervisory approach to consolidation in the banking sector.
SRB Chair Outlines Work Priorities for 2021
The SRB Chair Elke König published an article setting out work priorities for 2021.
FDIC Selects Companies to Compete in Final Phase of Tech Sprint
FDIC has selected 11 technology companies—including BearingPoint, Fed Reporter, Inc, and S&P Global Market Intelligence, LLC—for inclusion in the third and final phase of the rapid prototyping competition.